Staffing and Classification Audit Report

PDF Version (Size: 114.24 KB) (164 Kb)

Help on accessing alternative formats, such as PDF, PPT and ZIP files, can be obtained in the alternate format help section.

Planning phase: January 2008 to February 2008

Execution phase (fieldwork): February to March 2008

Report Date: May 28, 2008

Management Response: June 17, 2008

Tabled and Approved by DAC: June 19, 2008

Table of Contents

• 1.0 Executive Summary
  • 1.1 Background and Context
  • 1.2 Summary of Findings
  • 1.3 Audit Opinion
  • 1.4 Statement of Assurance/Reliance
  • 1.5 Key Recommendations
• 2.0 Audit Objectives, Scope and Approach
  • 2.1 Background
  • 2.2 Audit Objectives
  • 2.3 Audit Scope
  • 2.4 Audit Approach
• 3.0 Findings and Recommendations
  • 3.1 Authority, Responsibility and Accountability
  • 3.2 Policies to Support HR
  • 3.3 Core Appointment Values
  • 3.4 HR Performance Standards
  • 3.5 Enabling Technology and Resources
    

APPENDIX A – Audit Criteria

APPENDIX B – Management Action Plan

APPENDIX C – Audit Opinion and Statement of Assurance

1. Executive Summary

1.1 Background and Context

The objective of this internal audit was to provide assurance to the Deputy Head that Infrastructure Canada (INFC) has an adequate and effective control framework for classification and staffing activities, and that this framework is in line with its Human Resources (HR) Strategy as outlined in the Report on Plans and Priorities (RPP), 2007-2008, thus providing a foundation for having the right people to deliver the programs and serve clients.

As per the 2007-2008 RPP, INFC's success depends on a dedicated, well-trained and diverse workforce. The human resources strategy focuses on five key areas to ensure that the department has the right people to deliver programs and serve clients. Particular emphasis is placed on succession planning, staff retention, recognition and awards, and more efficient staffing.

The context in which HR staffing and classification activities have been carried out has been very challenging, particularly meeting compliance requirements while at the same time delivering business-specific client service. Although not unique to HR, this challenge introduces an element of risk for achieving objectives. During the period of this audit, HR enabling infrastructure was undergoing transition as support previously provided by Industry Canada had been discontinued (e.g. PeopleSoft system and data input, classification, language testing, job postings, and file management). Although progress has been made, the number of vacancies against required full time equivalents (FTEs) in the department remains high, creating pressures on all parts of the organization, including HR. New recruits are being added to the organization - however, departures make growth more challenging.

Both staffing and classification processes are expected to be fair, transparent, and consistent with core values. Classification has additional objectives including ensuring that intra and inter-departmental relativities of jobs across the public sector are maintained, as well as managing the overall compensation investment (i.e. appropriate pay for work performed). Newly provided authority for appointments from the Public Service Commission (PSC) allows INFC greater flexibility, autonomy and control in meeting these challenges, but should there be a contravention of delegated or sub-delegated authorities, remedial actions by the PSC could include additional conditions or limitations, or the partial or complete withdrawal of delegated staffing authorities. Should this risk materialize, INFC's ability to meet staffing and classification objectives would be further constrained. Given the objectives and challenges of staffing and classification, a strong control environment is needed.

1.2 Summary of Findings

The key sub-objectives for this audit and related findings are provided below.

1. Authority, responsibility and accountability for staffing and classification were clear, communicated, and acknowledged.
   The audit found that written sub-delegation, training, and support for line management were well managed. It was observed that while the HR Committee represents an internal best governance practice, some concerns were noted from line management that the delegated authorities were not optimal and required clarification to better reflect current and emerging operational needs.
2. Policies established to support staffing and classification activities have been followed.
   An appropriate suite of policies to support HR had been established as well as HR strategies, decisions, and practices all of which were well communicated via the department's intranet amongst other channels.
3. Core appointment values of merit and non-partisanship and guiding values of fairness, transparency, access and representativeness were respected.
   While the audit concluded that appointment values were respected, there are some moderate issues that need to be brought to the attention of management. Many staffing and classification files were missing signatures and/or dates needed to determine authority and accountability. Four out of 15 high-risk classifications actions tested (e.g. new positions, re-classifications) required independent validation of the work being performed relative to the job description in order to maintain the integrity of the classification system. Six staffing processes out of 25 tested had changing requirements that unfolded at various stages of the staffing process, but because the changes were not communicated, this condition could contribute to employee frustration and retention problems. For the purposes of demonstrating sound analysis in staffing decisions, seven files were missing meaningful documentation (e.g. position descriptions, assessments of candidates) that would facilitate understanding of decisions made.
4. HR Management monitors actual performance against planned results and adjusts course as needed.
   While the HR function is well resourced relative to comparable benchmarks, fundamental performance and service standards and measurement practices have not been established. These metrics could facilitate both process and outcome continuous improvement.
5. The HR function is enabled with the skills and tools necessary to discharge its responsibilities.
   The audit also noted very limited use of systems to support the HR function, although plans to improve this condition are underway.

1.3 Audit Opinion

INFC has some moderate issues related to the adequacy and effectiveness of the control framework for classification and staffing (recruitment, hiring and promotion) and its alignment with the Human Resources Strategy as outlined in the Report on Plans and Priorities, 2008-09. The control deficiencies are significant, but exposure is limited at this time (see Appendix C opinion types). The Management recommendations that follow are intended to strengthen the control environment and it is anticipated that anything less could serve to put the attainment of the Department's strategic objectives at risk over the longer term.

1.4 Statement of Assurance/Reliance

Based on our professional judgment as auditors, sufficient and appropriate audit procedures have been conducted to be in accordance with the Treasury Board (TB) Policy on Internal Audit, and the evidence gathered supports the accuracy of the conclusions contained in this report. The opinion is based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria that were agreed to with management. The evidence has been gathered to provide senior management with reasonable assurance of the accuracy of the conclusions drawn from this audit. This report and audit were conducted for INFC management purposes. Use of this report for other purposes may not be appropriate.

1.5 Key Recommendations

Authority, Responsibility and Accountability

1. HR should ensure that signatures and dates are consistently recorded in files.
2. Classification activities related to positions within HR should be signed-off by an independent and objective party outside of HR.
3. On-site reviews should be conducted and documented for high-risk classification activities that require independent Committee review.

Policies to Support HR

No recommendation.

Core Appointment Values

4. Continued focus should be placed on clarifying INFC's HR service delivery model and the integrated roles of HR and line management. In this regard, a more proactive approach should be taken by HR and hiring managers to ensure that staffing activities are more fully planned in advance of advertising job opportunities in order to minimize changes being made later in the process. Before initiating staffing actions, both current and future needs should be considered as well as the implications of the essential and asset requirements on the pool of candidates. Strategic HR advice is required to anticipate the impact of established merit criteria on the desired number of qualified candidates.

5. HR should ensure that meaningful documentation with respect to decisions is kept on file and in particular, applicant screening decisions and rationale. Position descriptions should be included in every file, and consistency across the job postings, merit criteria, and position descriptions should be validated by HR. An independent review of HR's own files on a sample basis is also recommended.

HR Performance Standards

6. Given INFC's business context and broader public sector governance expectations for strengthened planning and measurement practices, HR should confirm client expectations, specifically, service delivery standards (time, cost, level of support, roles, etc.) and develop core/basic service standards and initial targets within a longer term service delivery strategy. In confirming client expectations, it is recommended that HR use this opportunity to gather better practices from managers and share these throughout the department. HR management should determine average time to complete major parts of the staffing process (e.g. planning, classification, merit criteria, posting, assessment, selection, notification, and appointment) and set targets to reduce overall time and effort. Once performance metrics are established, it will be important to understand change management/transition implications and document and brief stakeholders on findings and recommended service standards and expectations.

Enabling Technology and Resources

7. While it is recognized that integrated HR and Information Management (IM) efforts are underway to strengthen data and analytical capability, Management should expedite current system plans and priorities in order to ensure that the time-consuming reporting and administrative burden on HR staff is automated as soon as possible. Current technology can significantly improve the operational effectiveness and efficiency of HR as well as standardizing processes. These internal HR capabilities, once completed, can provide the foundation for HR activities to be more tightly aligned with INFC's business and allow more time to focus on corporate strategy and to creating value through HR initiatives that address INFC's most pressing strategic challenges.

Head of Internal Audit's Signature

Yolande Andrews, Head of Internal Audit

2. Audit Objectives, Scope and Approach

2.1 Background

The context in which HR staffing and classification activities have been carried out has been very challenging particularly meeting compliance requirements while at the same time delivering business-specific client service. Although not unique to HR, this challenge introduces an element of risk for achieving objectives. During the period of this audit, HR enabling infrastructure was undergoing transition as support previously provided by Industry Canada had been discontinued (e.g. PeopleSoft system and data input, classification, language testing, job postings, and file management). Although progress has been made, the number of vacancies against required FTEs in the department remains high, creating pressures on all parts of the organization, including HR. New recruits are being added to the organization - however, departures make growth more difficult. (Source: HR Presentation to Management Committee, Dec 11, 2007; In 2007, 60 departures to 83 arrivals).

Under these conditions, pressures on staffing and classification processes can expose INFC to higher risks than would otherwise be anticipated. Demands to hire more expeditiously and a strong need to retain existing employees can lead to actions that are not viewed as being fair, transparent, or consistent with other core appointment values. Also, when demands for HR expertise are high and the availability of qualified people in the marketplace is low, levels of service from HR can be stretched beyond capacity - not having enough qualified staff to hire people and classify jobs introduce inherent risks to achieving objectives.

Both staffing and classification processes are expected to be fair, transparent, and consistent with core values. Classification also needs to ensure that intra and inter-departmental relativities of jobs across the public sector are maintained, as well as managing the overall compensation investment (i.e. appropriate pay for work performed). These objectives are not easily achieved given that the classification system applies to a very large population performing a significant variety of work. The classification objective of equal pay for equal work across the entire public sector is harder to achieve than in the context of a small company where the work is all very similar. Also, the competency required for classification and re-classification work is relatively high (compared to staffing) as it has additional objectives as explained above. Given the objectives and challenges of classification, a strong control environment is needed.

Newly provided authority for appointments from the PSC allows INFC greater flexibility, autonomy and control in meeting these challenges, but should there be a contravention of delegated or sub-delegated authorities, remedial actions by the PSC could include additional conditions or limitations, or the partial or complete withdrawal of delegated authorities. Should this risk materialize, INFC's ability to meet staffing and classification objectives would be further constrained.

2.2 Audit Objectives

As per INFC's risk-based audit plan, the objective of this audit was to provide assurance that Infrastructure Canada has an adequate and effective control framework for classification and staffing (recruitment, hiring and promotion) and that this framework is in line with its Human Resources Strategy as outlined in the Report on Plans and Priorities, 2008-09.

The key sub-objectives developed for this audit were to provide assurance that:

1. Authority, responsibility and accountability for staffing and classification were clear, communicated, and acknowledged.
2. Policies established to support staffing and classification activities have been followed.
3. Core appointment values of merit and non-partisanship and guiding values of fairness, transparency, access and representativeness were respected.
4. HR Management monitors actual performance against planned results and adjusts course as needed.
5. The HR function is enabled with the skills and tools necessary to discharge its responsibilities.

Detailed criteria developed for each of the objectives above are provided in APPENDIX A – Audit Criteria.

2.3 Audit Scope

INFC staffing and classification activities completed and/or in progress during the period of January 2007 to March 2008 were included in the scope of this audit. Given that some HR policies were being developed during the course of the audit, only those policies that were in effect during the audit period were used.

2.4 Audit Approach

To conduct the audit, a combination of sample file reviews, interviews, and review of relevant documentation were used to gather evidence in support of the audit conclusion provided. The planning phase of the audit included preliminary interviews and review of documents in order to understand the INFC context and processes at a high level. Based on this understanding, a sample of 25 files was selected for detailed review from the population of approximately 300 staffing activities using a risk-based approach which was informed by discussions with management and the review of the population of activities including the type and level of activity. Similarly, from approximately 120 classification activities conducted during the audit period, 15 were selected for detailed review. Sample sizes selected were consistent with Deloitte's standard auditing practices and guidance provided by the Institute of Internal Auditors.

Interviews were conducted with 14 INFC employees, the majority of whom were in management positions. With respect to documentation, substantial documentation was reviewed in the conduct of this audit, including (but not limited to) the INFC HR Plan, Report of Plans and Priorities, Departmental Staffing Accountability Report, various HR procedural documents, Classification Monitoring Report, Staffing Monitoring Report, HR Committee Terms of Reference, Classification Committee Terms of Reference, internal HR policies, and the HR budget, amongst others.

3. Findings and Recommendations

3.1 Authority, Responsibility and Accountability

Findings

We expected to find written sub-delegation of appointment authorities granted by the deputy head to managers. We also expected to find that managers had formally accepted and understood their responsibilities and accountabilities and had the necessary training, access to appropriate advice and tools to exercise their staffing and classification authorities.

Consistent with expectations, we found written sub-delegation instruments and evidence of appropriate training and provision of support and advice for managers. HR had implemented an effective system to track sub-delegated HR authorities and related training. Prior to being given authorities, managers were required to complete training and had a one-on-one meeting with an HR advisor. Managers reported having a very clear understanding of their responsibilities and accountabilities, and clarity with respect to roles.

We also expected to find signatures on staffing and classification decisions consistent with delegated authorities. Based on the sample file review in both staffing and classification, many files did not include signatures as expected and/or dates were missing. In making improvements in this area, HR management reported their intention to clarify which signatures are key for each type of staffing activity and will then take measures to ensure these are on file.

With respect to classification, independent and objective approvals were observed in all but one file (a staffing action in the HR function). We also expected to find independent validation of the work descriptions via on-site review for all re-classifications to ensure that the work being performed was consistent with the new classification. Of the four re-classification files reviewed, only one contained evidence of an on-site review.

Contextually, findings such as those noted above are not unusual for a high growth, dynamic organization that is also experiencing high turnover such as at INFC. However, it should be noted that less than full signatory compliance can result in confused or blurred accountability for decisions and actions. Employees may be making decisions or taking actions for which they do not have authority and/or for which they have not been trained. Inadequacy of signatures and dates may also result in INFC management having difficulties in defending decisions and actions taken should valid grievances be filed. Further, incomplete on-site reviews can result in the department over or under paying staff and may compromise the integrity of the classification system.

While the HR Committee represents an internal best governance practice, based on interviews, some concerns were noted from line management that the delegated authorities were not optimal and required clarification to better reflect current and emerging operational needs. Interviewees were concerned specifically about the increase in the overall process time which is considered to be too long even without HR Committee approval. As a consideration for Management, and as already initiated, the HR Committee should continue to evolve towards a higher level oversight role increasingly delegating transactional approvals lower in the organization as appropriate, and in alignment with PSEA intentions to reduce the length of staffing processes.

Recommendations

1. HR should ensure that signatures and dates are consistently recorded in files.
2. Classification activities related to positions within HR should be signed-off by an independent and objective party outside of HR.
3. On-site reviews should be conducted and documented for high-risk classification activities that require independent Committee review.

See Management Response in APPENDIX B – Management Action Plan

3.2 Policies to Support HR

Findings

We expected to find that INFC had an approved set of policies that guide the organization in its staffing and classification, and practices to ensure the integrity of the classification system. We also expected to find that policies had been communicated to all stakeholders including bargaining agents.

Consistent with expectations, we found that HR had established a suite of policies to support staffing and classification activities, amongst others, and had effectively communicated these to INFC employees through presentations, emails, bulletins, and the department's intranet site. Following the implementation of the new legislation, a cross-government small agency transition support team was formed to develop policies which had been discussed with bargaining agents and were approved by the transition team. These policies were adopted by INFC as well as many other small departments. Going forward and as agreed with the bargaining units, only significant changes to policies will be communicated.

Recommendations

No recommendations required.

See Management Response in APPENDIX B – Management action plan

3.3 Core Appointment Values

Findings

Merit, fairness and transparency in staffing activities.

We expected to find that merit criteria, including essential and asset qualifications of the job were established for all job postings, and that these were consistent across the job posting, job description, and assessment tools used for selecting candidates. We expected to find sound analysis of candidates based on merit, and the use of relevant and up-to-date information including references and background checks as appropriate. We also expected to see that objective and consistently applied eligibility, selection and promotion criteria were open and documented, and used to attract, identify and select an appropriate candidate.

From our review of 25 sample files, we found six staffing actions that were advertised with a specific requirement or description that were later changed, downgraded, or were inconsistent with the statement of merit criteria. Examples include downgraded language requirements, downgraded security requirements, and indeterminate positions later becoming term positions. In three of these files, the job posting advertised a single opportunity which later turned into multiple opportunities, one with a small variation between the two opportunities.

The impact of changing requirements or other information about job opportunities after the position has been advertised can lead to employee frustration and possibly contribute to retention problems. As advertised, the opportunity may not have been a good fit for an employee, but under changed conditions which were not communicated to potential candidates, it may be perceived as a good opportunity missed. Changes in requirements after the initial posting may also be perceived as unfair staffing practices intended to limit opportunities to a single or few preferred candidates. Overall, these conditions lead to less than optimal awareness and accessibility to potential opportunities. Although both line management and HR reported clarity with respect to authority and accountability for their respective decisions and actions, the expertise required to reduce conditions such as those noted above does not appear to be well integrated and as effective as needed.

The audit also found that five files that should have included position descriptions did not. As such, it was not possible to determine if the merit criteria reflected the position description. Two files did not include evidence that an assessment of the candidate was conducted against stated merit criteria. While assessments were completed in most files, many were missing signatures or dates of those performing the work. Where assessment documentation is missing, management is exposed to the risk of not being able to adequately defend actions and decisions taken, particularly if a staffing complaint is filed with the Public Service Commission. Ultimately, these conditions can impact the Department's delegated authorities.

Transparency in HR strategies, decisions, and practices.

We expected to find that information about HR strategies, decisions, policies and practices were communicated in an open and timely manner. Interviewees consistently reported that the HR function made good use of the department's intranet and various other channels to communicate this information. HR Committee meeting notes which provide a record of decisions taken are promptly posted to the intranet available to all employees.

Representativeness

Based on the sample of files that we reviewed, and in particular the language used in work descriptions and job postings, we did not observe anything that would suggest a bias towards or against persons belonging to a designated group. We observed that management monitors and tracks statistics (e.g. number of appointments of persons belonging to designated groups versus workforce availability of persons belonging to designated groups) to ensure that appointment processes are conducted without bias and do not create systematic barriers to help achieve a public service that reflects the Canadian population.

Recommendations

4. Continued focus should be placed on clarifying INFC's HR service delivery model and the integrated roles of HR and line management. In this regard, a more proactive approach should be taken by HR and hiring managers to ensure that staffing activities are more fully planned in advance of advertising job opportunities in order to minimize changes being made later in the process. Before initiating staffing actions, both current and future needs should be considered as well as the implications of the essential and asset requirements on the pool of candidates. Strategic HR advice is required to anticipate the impact of merit criteria established on the number of qualified candidates.

5. HR should ensure that meaningful documentation with respect to decisions is kept on file and in particular, applicant screening decisions and rationale. Position descriptions should be included in every file, and consistency across the job postings, merit criteria, and position descriptions should be validated by HR. An independent review of HR's own files on a sample basis is also recommended.

See Management Response in APPENDIX B – Management action plan

3.4 HR Performance Standards

Findings

While business-aligned and balanced standards and measurement practices are not the norm for high growth dynamic organizations, we expected to find that INFC's HR function had set fundamental targets and measurement practices aligned with HR priorities, client service delivery expectations, and compliance requirements (e.g. time to hire, arrivals to departures, HR resources to organization size, etc.) and used the information for continuous improvement.

We found that targets for performance aligned with HR priorities, client service delivery expectations or compliance requirements have not been established. When resources are allocated to the HR function without any measure of expected and actual results, achievement of the HR priorities is not optimized. In particular, and given INFC's operational demands for more qualified staff, it is important that HR position itself to improve advertised staffing processes that can attract qualified candidates to INFC in a time-efficient manner.

Of note, however, and based on interviews and a review of the IM/IT Division's HR Plan, 2007-08, the IM/IT division appears to have had significant success (an internal best practice) in metrics related to time to hire, employee retention, and alignment of performance targets between employee, supervisor, and the division overall.

Recommendations

6. Given INFC's business context and broader public sector governance expectations for strengthened planning and measurement practices, HR should confirm client expectations, specifically, service delivery standards (time, cost, level of support, roles, etc.) and develop core/basic service standards and initial targets within a longer term service delivery strategy. In confirming client expectations, it is recommended that HR use this opportunity to gather better practices from managers and share these throughout the department. HR management should determine average time to complete major parts of the staffing process (e.g. planning, classification, merit criteria, posting, assessment, selection, notification, and appointment) and set targets to reduce overall time and effort. Once performance metrics are established, it will be important to understand change management/transition implications and document and brief stakeholders on findings and recommended service standards and targets.

See Management Response in APPENDIX B – Management action plan

3.5 Enabling Technology and Resources

Findings

We expected to find that the staffing and classification functions were enabled with human and financial resources that were appropriate, sufficient, and effectively deployed to achieve the related priorities in the HR Plan, client service delivery expectations, and operational compliance requirements.

With respect to appropriateness and sufficiency of resources, we found that the HR function is generously resourced relative to comparable benchmarks¹. The function has a complement of 17 FTEs servicing a department of less than 200 employees at an annual salary and benefits cost of approximately $1 million per year. The ratio of HR staff to employees at INFC is 1:12 (200 INFC employees to 17 HR employees), significantly higher than the public sector average of 1:33. An additional $1.3 million is allocated to the HR function in a professional services budget. Federal government benchmarks show that HR total expenses are 3 to 4% of a department's operating expenditures while at INFC for the 2007–2008 fiscal year, HR total expenses ($2.3 million) are 6% of the department's budget ($37.8 million as per RPP 2007-2008).

In terms of the effectiveness of resources deployed, interviewees noted the high turnover in HR and the impact on service delivery. Consultants and temporary help are used to support various activities (e.g. conducting initial screening, developing rating guides, managing logistics of interviews, testing, and boards, file management, classification, etc.) both in HR and in divisions and results have been inconsistent.

We also expected to find that enabling systems are used to support and track staffing and classification services. We found that there is very limited use of systems to support the HR function, although there are plans in place to improve this. We found data integrity issues with the manual staffing log, particularly with respect to staffing codes which limits the reliability of data analysis and reporting. Over the long-term, the lack of effective systems to support HR may result in escalating HR costs, an inability to provide appropriate information for decision making purposes and support the department at a strategic level, and continued problems in attracting and retaining qualified HR staff due to the heavy administrative aspects of the function. Further, to enable the implementation of a longer term service delivery strategy as recommended previously, HR systems must be in place.

While it is recognized that INFC is a small dynamic organization and that a minimum critical mass of HR functionality is required and will be proportionally higher than a mid-to-large size department, current HR service delivery and cost to manage metrics appear high. On face value, the current profile could suggest delivery of very high levels of service, high turn-over organization, high growth and possibly less than effective processes and line manager participation. Once more effective core basic processes and programs are in place the HR cost to manage should be reduced over the longer term.

INFC is a small department, there is a significant administrative burden that must be borne in order to provide staffing and classification services, as well as HR service overall. Central agency reporting requirements are significant and can consume a large portion of the resources allocated to HR. Technology can ensure that core HR systems are integrated, data standards are applied, and growth can be more readily managed. To enable the implementation of the longer term service delivery strategy, HR systems must be in place.

Recommendations

7. While it is recognized that integrated HR and Information Management (IM) efforts are underway to strengthen data and analytical capability, Management should expedite current system plans and priorities in order to ensure that the time-consuming reporting and administrative burden on HR staff is automated as soon as possible. Current technology can significantly improve the operational effectiveness and efficiency of HR as well as standardizing processes. These internal HR capabilities, once completed, can provide the foundation for HR activities to be more tightly aligned with INFC's business and allow more time to focus on corporate strategy and to creating value through HR initiatives that address INFC's most pressing strategic challenges.

See Management Response in APPENDIX B – Management Action Plan

APPENDIX A – Audit Criteria

Audit Objectives and Criteria

Objective 1: To provide assurance that authority, responsibility and accountability for staffing and classification are clear, communicated, and acknowledged.

1. Written sub-delegation of appointment authorities has been granted by the deputy head to officials who will be exercising these authorities; sub-delegated managers have formally accepted and understand their responsibilities and accountabilities.
2. Sub-delegated officials have received the necessary training, have access to appropriate advice and have the tools to exercise their staffing and classification authorities.
3. Signatures on staffing and classification decisions are consistent with delegated authorities. Staffing and classification actions and decisions are fully documented.
4. Classification actions are reviewed and approved by independent & objective parties, and are consistent with delegated authorities. Classification actions and decisions are fully documented.

Objective 2: To provide assurance that policies established to support staffing and classification activities are followed.

1. INFC has an approved set of policies that guide the organization in its appointment and classification processes.
2. There are established management policies and practices to ensure the integrity of the classification system
3. Policies have been communicated to all stakeholders including bargaining agents
4. Acting Appointment
   Non-advertised acting appointments which are made for a period of more than four months are approved by the HR Committee.
   Appointment-related decisions are fully documented.
5. Non-advertised Appointment
   The HR committee was provided with appropriate relevant information to be able to approve non-advertised appointments.
   Appointment-related decisions are fully documented.
6. Area of Selection Policy (July 2007) Compliance
   As of April 01, 2006, all officer-level jobs (including EX) open to the public and located in NCR must include a national area of selection; As of April 02, 2007, all officer-level jobs (including EX) open to the public and located across Canada must include a national area of selection.
   Appointment-related decisions are fully documented.
7. Notification Policy (April 2006) Compliance
   Notification of the names of persons being considered for appointment and of the names of persons being proposed for appointment, or being appointed, is communicated in writing to the persons entitled to be notified.
   Appointment-related decisions are fully documented.
   

   Informal Discussion Policy (December 2005) Compliance

8. INFC employees are aware that during an internal appointment process, persons eliminated from consideration have the opportunity to discuss the decision to eliminate them as soon as possible after the decision is made.
9. Processes exist for appeal and redress, and such processes and mechanisms are effectively communicated.

Objective 3: To provide assurance that core appointment values of merit and non-partisanship and guiding values of fairness, transparency, access and representativeness are respected.

Merit criteria

1. Merit criteria (including essential qualifications of the job, qualifications that would be considered assets to the job, both now and in the future, and current or future operational requirements and organizational needs) are established for job postings.
2. The merit criteria reflect the position description
3. There is alignment between the statement of merit criteria in job postings and the assessment criteria.
4. Documentation on file demonstrates that appointments are made on the basis of merit criteria.
5. Fairness and non-partisanship
   Staffing decisions are supported by documented sound analysis using all relevant and up-to-date information that includes references and background checks.
   Appointment-related decisions are fully documented.
6. Transparency
   Information about strategies, decisions, policies and practices is communicated in an open and timely manner (HR Plan, all policies, guidelines, notices of appointment and intent etc.).
7. Transparency
   Objective and consistently applied eligibility, selection and promotion criteria are open and documented, and used to attract, identify and select an appropriate candidate.
8. Representativeness
   Language used in work descriptions and job postings does not create or suggest a bias towards or against persons belonging to a designated group.
9. Management monitors and tracks statistics to ensure that appointment processes are conducted without bias and do not create systematic barriers to help achieve a public service that reflects the Canadian population it serves (e.g. statistics on appointments of persons belonging to designated groups versus workforce availability of persons belonging to designated groups).

Objective 4: To provide assurance that HR Management monitors actual performance against planned results and adjusts course as needed.

1. INFC-HR sets targets for and monitors performance aligned with HR priorities, client service delivery expectations, compliance requirements, and the information is used to make improvements to staffing and classification processes (e.g. time to hire, arrivals to departures, HR resources to organization size, etc.)

Objective 5: To provide assurance that the HR function is enabled with the skills and tools necessary to discharge its responsibilities.

1. The staffing and classification functions are enabled with human and financial resources (budget for consultants) that are appropriate, sufficient, and effectively deployed to achieve the related priorities in the HR Plan, client service delivery expectations, and operational compliance requirements.
2. Enabling systems are used to support and track staffing and classification services.

APPENDIX B – Management Action Plan

List of Recommendations and Management Response

Recommendations	Responsibility	Response and Actions to be taken (including timeline)
Authority, Responsibility and Accountability
1. HR should ensure that signatures and dates are consistently recorded in files.	Manager, HR Services (Operations)	Agreed. HR will: 1. Review and amend its staffing checklist to include the verification of signatures and dates on key documents. Timeline – July 30, 2008
2.Classification activities related to positions within HR should be signed-off by an independent and objective party outside of HR.	HR Director	Agreed. A new HR Instrument of delegation was implemented in March 2008. Since then all classification requests for new and updated positions require ADM approval. 2. The Chief Financial Officer (CFO) will act as the independent and objective party. Timeline – Implemented in March 2008
3. On-site reviews should be conducted and documented for high-risk classification activities that require independent Committee review.	Manager, HR Services (Corporate)	Agreed. HR will: 3. Conduct on-site reviews for all high-risk classification activities. Timeline: starting July 2008
Core Appointment Values
4. Continued focus should be placed on clarifying INFC's HR service delivery model and the integrated roles of HR and line management. In this regard, a more proactive approach should be taken by HR and hiring managers to ensure that staffing activities are more fully planned in advance of advertising job opportunities in order to minimize changes being made later in the process. Before initiating staffing actions, both current and future needs should be considered as well as the implications of the essential and asset requirements on the pool of candidates. Strategic HR advice is required to anticipate the impact of established merit criteria on the desired number of qualified candidates	HR Consultant HR Advisors Director HR Manager, HR Services (Operations)	Agreed. HR will: 4. Ensure all branches produce HR plans. Timeline: March 2009 5. Document discussions with managers on current and future needs that occur prior to posting vacancies Timeline Immediately 6. As appropriate the following language will be included in future advertisements. "This process may be used to establish a pool of qualified candidates to fill similar positions." Timeline: Immediately As it will be difficult to foresee all emerging vacancies, HR will also: 7. Amend the "criteria for non - advertised appointments" (guidelines) so that managers who want to appoint candidates from pools established to fill vacancies will be able to do so with HR Committee approval. Timeline: September 2008
5. HR should ensure that meaningful documentation with respect to decisions is kept on file and in particular, applicant screening decisions and rationale. Position descriptions should be included in every file, and consistency across the job postings, merit criteria, and position descriptions should be validated by HR. An independent review of HR's own files on a sample basis is also recommended.	Manager, HR Services (Operations)	Agreed. As inconsistencies have been noted in the decision making process, a more rigorous and thorough review will be implemented to ensure that all required documentation is on file to support the staffing action. (As a note, position descriptions are not required on file, such as: casual, acting less than 4, students, assignment/secondment). HR will: 8. Modify its checklist and add additional steps to ensure that the file documentation supports decisions Timeline: July 30, 2008 9. Include a senior officer final review. Timeline: July 30, 2008
HR Performance Standards
6. Given INFC's business context and broader public sector governance expectations for strengthened planning and measurement practices, HR should confirm client expectations, specifically, service delivery standards (time, cost, level of support, roles, etc.) and develop core/basic service standards and initial targets within a longer term service delivery strategy. In confirming client expectations, it is recommended that HR use this opportunity to gather better practices from managers and share these throughout the department. HR management should determine average time to complete major parts of the staffing process (e.g. planning, classification, merit criteria, posting, assessment, selection, notification, and appointment) and set targets to reduce overall time and effort. Once performance metrics are established, it will be important to understand change management/transition implications and document and brief stakeholders on findings and recommended service standards and expectations.	HR Director and Manager, HR Services (Operations)	Agreed. Steps will be taken to educate managers on their obligations in the staffing process to ensure a seamless flow of information and to minimize the time required to complete a staffing action. In addition, HR will be developing staffing standards for various staffing actions, so that managers are clear on how quickly an action can be delivered when they supply the appropriate documentation, and monitoring can take place to ensure the overall effectiveness. HR will: 10. Undertake consultation on service delivery standards with line managers so as to understand client expectations Timeline September 2008 11. Develop a service delivery model with roles, accountability and expectations defined for both HR and managers Timeline: First draft November 2008, final version December 31, 2008
Enabling Technology and Resources
7. While it is recognized that integrated HR/IM efforts are underway to strengthen data and analytical capability, Management should expedite current system plans and priorities in order to ensure that the time-consuming reporting and administrative burden on HR staff is automated as soon as possible. Current technology can significantly improve the operational effectiveness and efficiency of HR as well as standardizing processes. These internal HR capabilities, once completed, can provide the foundation for HR activities to be more tightly aligned with INFC's business and allow more time to focus on corporate strategy and to creating value through HR initiatives that address INFC's most pressing strategic challenges.	HR Director and Manager, HR Services (Corporate)	Agreed. HR has implemented a project management approach to expedite the implementation of HRIS. There is an approved project charter with defined roles and responsibilities and project phases. HR will use this project plan and: 12. Monitor progress on a bi-monthly basis Timeline: Started in May 2008 13. Review its business process and adapt them to the HRIS functionality. Timeline: September 2008. 14. Provide quarterly reports to managers showing data generated using HRIS. Timeline: Quarterly, starting January 2009

APPENDIX C – Audit Opinion and Statement of Assurance

Types of audit opinion that can be formulated

The auditor's opinion is based on logical specific deductions about the audit objectives based on the findings against criteria and noteworthy accomplishments in the report. Standardized language is needed in order to ensure consistency in the formulation of an opinion across different audit areas and different time periods. In addition, it allows the deputy head and other readers to better understand the opinion being expressed.

In my opinion, the [audit entity examined]:

• Is well controlled (at least one of the first two criteria needs to be met and the third criterion needs to be met)
  • well managed, no material weaknesses noted; or
  • well managed, but minor improvements are needed; and
  • effective and sustainable.

Or: Has moderate issues requiring management focus (at least one of the following two criteria need to be met)

• significant control weaknesses, but exposure is not serious; or
• multiple risk areas, but exposure is not serious.

Or:

• Requires significant improvements (at least one of the following four criteria need to be met)
• financial adjustments material to line item or area; or
• control deficiencies represent serious exposure; or
• major deficiencies in overall control structure; or
• financial adjustments material to the company.

Statement of Assurance

The opinion is supported by a clear indication to users of the level of assurance being provided. Users need to be informed of the auditor's judgment about the confidence that may be placed in the opinion above. This section informs the reader that the auditor has conducted the engagement in accordance with the Treasury Board Policy on Internal Audit (and IIA Professional Internal Auditing Standards - provided that the results of the quality assurance program indicate that the internal audit function is in compliance with the Standards). This section also explains that the auditor has examined sufficient, relevant evidence and obtained sufficient information and explanations to provide a reasonable level of assurance on the reported opinion or conclusions. (Not all assurance engagements are designed to provide, or result in providing, a reasonable level of assurance. When this is the case, the auditor's statement of assurance shall identify the circumstances (e.g., limited procedures, inconclusive evidence, etc.) that affect the level of assurance and shall indicate the auditor's caution on reliance on these opinions or conclusions).

• ^[1] "State of the HR Function in Canada", Deloitte, 2003/04. "The Strategic Value of People: Human Resource Trends and Metrics", Conference Board of Canada, July 2006.